Power rate fixes help Intertape to expand

The news this week that Intertape Polymer is investing $22 million in its local plant to add manufacturing lines is a huge turnaround from two years ago when an unexpected electric rate increase from Danville Utilities threw the company’s budget out of balance.

In August 2014, David Bennett — then the operations manager at the Ringgold plant and now the vice president of operations, CST and films for the company — told the Danville Utility Commission that other Intertape plant locations enjoyed electric rates 11 to 31 percent lower than the Ringgold plant and projects would be shifted to those plants.

That could cause job losses at the plant, which was — and still is — Danville Utility’s largest customer, Bennett warned. The company employed about 300 workers who earned between $16.50 and $17 an hour.

In response, Danville Utilities did change the rates it charged its industrial customers, taking into account the way major manufacturers — like Intertape — use electricity 24 hours a day, seven days a week.

During that time, the company also instituted a variety of energy efficiency programs, including recognizing employees who came up with ideas for cutting costs.

“We were very aggressive,” Mike Jones, operations manager at the Ringgold plant, said. “It helped offset rising power costs. This equipment costs a lot to run, and what Danville [Utilities] has done is become competitive … hats off to the city.”

Intertape worked out a power purchase agreement with Danville Utilities, Jones said, which included a commitment from the company to guarantee certain levels of electricity will be used throughout the day — much the way Danville Utilities has purchase agreements with its providers.

Jones said the agreement allowed Intertape to get a better rate because the utility could broker a better deal for guaranteed usage.

Because of the company’s efforts to become more energy efficient, combined with a better electric rate, it is now competitive with Intertape’s other plants and has encouraged the company to invest in the Danville plant.

“Corporate has a lot of confidence in our plant and likes the region,” Jones said.

Bennett said the company is back up to full staffing and continues to operate around the clock. The expansion will involve increasing capacity and the purchase of more modern equipment, he said.

“I hope we continue on our path and this is a sign of things to come,” Jones said.